The dramatic fall of the Australian dollar means it's becoming more expensive for Australian manufacturers to source components and parts from overseas.
But just how it is costing compared to local specialists is unknown – unless you ask.
In July 2011 the Australian dollar peaked at $1.10 against the US dollar, but has recently seen lows of 70 cents.
This means importers have seen a 35-40 percent increase in costs in round terms and this does not include increases in Chinese labour costs.
Australian Repetition Fabrication & Components specialist Swift Metal Services, encourages local manufacturers to obtain comparative pricing in Australia before placing their next order for products or parts overseas.
Some Swift Metal Services’ clients who use both locally and imported componentry say nasty surprises can await those who place repeat orders overseas without inquiring about the impact of currency devaluations.
Swift have proved time and again that short to medium runs of pressed steel parts, metal componentry and stamped components can be manufactured in Australia for similar nett costs to imported parts.
Aside from the costs, Australian made metal components, produced on high technology machinery, can be supplied on considerably reduced lead times and with greater accuracy and more consistent quality, than imported components.
Swift Metal says Australian manufacturers should consider the overall cost cycle when using imported parts.
In addition to exchange rate fluctuations, costs that may not be obvious include:
· Freight (including road freight from wharf to customer)
· International payment charges
· Import duties
· Customs processing charges
· Additional warehousing expenses
· Increased inventory required to ensure imported parts on inevitable long lead times don't adversely impact production.
This is especially relevant around February, with the impact of Chinese New Year holidays.
In addition to the cost pressures arising from the falling Australian dollar, there is the problem that often occurs where repetition fabrications or metal components arrive faulty or out of specification.
Proven repetition fabrication like Swift are aware of many firms that have trialled importing components from countries with lower labour costs than Australia and have had the inevitable batch of faulty parts – often after two or three deliveries of acceptable components.
There is no secret to producing quality Australia components – it includes investing in staff training, the latest and most efficient machinery, and utilizing LEAN manufacturing techniques.
Contact Swift to see if your imported parts are affecting your bottom line.
Swift Metal Services
Ph: 1800 626 525